UNDER-SAVING BEHAVIOR, TIME INCONSISTENCY AND FINANCIAL LITERACY
Keywords:
Under-Saving Behavior, Time Inconsistency, Financial LiteracyAbstract
There is significant variation in savings within income, age, and educational categories. Using a sample of Dhurakij Pundit University students, this paper presents an empirical evidence on factors that influence the saving choice of the students. The hypothesis is that if students are time-consistent and financial literate, the saving rate will increase. The results are in accordance with the prediction of the model, that is, behavioral economics which explains that the differences in the savings rates are caused by the differences in time-consistence and financial literacy behaviors, can be used to comprehend the under-saving behavior.
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